In the 1970s, changes in technology made it easier to use 1-800 numbers for shopping by telephone. In 1993, the date of the referenced paper, telephone shopping accounted for $200 billion a year in sales which gave rise to the call center industry.
An inbound call center consists of telecommunications lines carrying telephone calls to a specific location, switching machines to sort and allocate the calls, and agents who receive the calls. The primary purpose for such a call center is to receive calls for such things as catalog purchases, airline or hotel reservations, customer service questions, and so forth. The call center concept has become an $8 billion per year service industry linking customers, businesses, and a long-distance carrier, such as AT&T.
The costs of labor and communications associated with call centers have increased, and businesses are attempting to improve the ability of their call centers to serve their customers. As a result, AT&T developed and put into use a simulation model to study various possible call center scenarios for their existing and potential customers. Such simulation models must account for a number of factors, including staffing, average number and length of calls, number of available lines, hours of operation, and busy signals. The behavior of customers also must be simulated, particularly behavior which occurs when callers are placed on hold. Some callers placed on hold immediately hang up, some wait a short period of time, and others will wait a fairly long time. Of those callers who hang up when placed on hold, some will call back, and others will not.
A specific example of a successful business using AT&T's Call Processing Simulator is Northwest Airlines, which implemented the recommended results of the simulation. By doing so, Northwest was able to increase the number of calls answered by 20%, with 20% fewer agents and 27% less in overtime costs. This resulted in a 5% increase in revenue for the airline.
In 1992 alone, AT&T conducted over 2000 such simulation studies for their customers (either current or potential). This resulted in a $1 billion increase in AT&T's share of the $8 billion a year industry. Moreover, AT&T's business customers implementing these simulation studies were able to increase their annual profits by some $750 million.